Qatar to Invest $20 Billion Into US Energy Sector

Qatar Petroleum, the world’s biggest seller of liquefied natural gas, is looking to get even larger, investing $20 billion in America’s oil and gas fields at a time when rival U.S. exporters are expanding.

The investments will be made over five years, Chief Executive Officer Saad Sherida al-Kaabi said in an interview with Bloomberg News in Washington. Some of that will likely go toward lining up gas supplies for the Golden Pass LNG export project in Texas, being developed with Exxon Mobil Corp.

Al-Kaabi said Qatar will probably be announcing a deal in the U.S. “before the end of the year,” but he declined to say whether it would involve oil or gas. Qatar is also looking to invest an additional $5 billion in so-called downstream assets, such as chemicals projects, he said.

“We have a huge growth plan,” al-Kaabi said. “We’re talking to many people and many companies in the U.S.” Within 8 years, he added, the company plans to go “from 4.8 million barrels of oil equivalent a day to 6.5 million.”

The state-owned company is looking at both shale and conventional resources in the U.S., according to al-Kaabi. Qatar Petroleum and its partners in the Golden Pass project are now weighing commercial bids from contractors, and expect to decide whether to move forward with the project by the first quarter of 2019, he said.

‘Final Stages’

“We’re in the final stages to really make a decision very soon,” he said. “We are very eager to do the project. We think this is a very important project for us, and we believe we’re aligned with Exxon Mobil on that.”

The final go-ahead will come only after the company secures gas to feed the project. “You can buy gas off the market, but we want to be naturally hedged.”

While Qatar is currently the top LNG exporters, according to the International Gas Union, the U.S. is on the rise, and analysts have speculated it could grab the top spot in the next two years as new American projects get the green light.

Two U.S. export terminals are in service — one in Louisiana and one in Maryland — and four more are expected to come online by 2020. A long list of others are vying for a spot in the global market. Golden Pass is one of four fully permitted U.S. ventures that are still awaiting a final investment decision from developers.

Important Partnership

Of Qatar Petroleum’s 14 LNG-producing units — called “trains” — all but one were developed alongside U.S. companies, al-Kaabi said. He said he hopes to show the U.S. government the importance of seeing Qatar as a business partner, especially after the Trump administration sided with Saudi Arabia and others at the start of an ongoing blockade against the Arab country.

“We felt we deserved more support from the U.S. than we got,” al-Kaabi said. “I don’t think the U.S. administration or the U.S. public understands how important Qatar is and how good Qatar has been to our partners.”

Qatar’s relationship with the administration seems to be improving, he said, adding that he has several meetings lined up with U.S. officials — including a one-on-one with Energy Secretary Rick Perry — while he’s in Washington for the World Gas Conference.

“That relationship in the long term is very important to us,” al-Kaabi said. “We have an economic tie that’s very strong.”

Yes, Qatar has the 3rd largest oil & gas reserves and produces about 1 million barrels of oil & LNG a day. Multiply by 365 days and $70+ per barrel, and you get annual revenues around $25 billion a year. Even after upkeep / growth of the energy infrastructure and government employees’ salaries, that leaves a lot of billions of dollars.

Most oil producers ‘squander’ their earnings on handouts to their citizens, but Qatar has only around 2.5 million people (a little more than in New Mexico or the city of Houston), so they still have a ton of money left over for investment – education, industrialization, and technology. After many decades of oil income and investment / growth, Qatar has the highest per capita GDP in the world (over $100,000 per person!).